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Cash-on-Delivery (COD) remains a dominant force in Indian e-commerce - COD constituted 55% of the total online transactions in 2023, the number was 86% back in 2012

COD isn't just a payment option; it's a cultural choice deeply rooted in the Indian consumer's psyche. We need to understand and adapt to these cultural nuances to succeed in the conversions market.

Digital payments are all the younger generations, the Gen Zers & Gen Alpha, have ever known. But we are not there yet.

Dramatic Plot Twists:

COD is used because of lack of trust, or because some consumers think COD is the loophole. But either way, the brands suffer great losses in the COD market, because of dramatic plot twists they are prone to.

30% of all first-time online shoppers in India choose COD as their preferred payment method

COD is like a welcoming handshake for new customers. It breaks down barriers and opens the doors for them to experience online shopping.

COD ensures no one is left behind - be it urban, semi-urban, or rural.

But, COD buyers Plays Dirty: 

Incorrect change during delivery? They return

Delayed COD orders? They cancel

Product damage? They return

Mismatch? They might not replace

Etc. 

The Unstable Romance:

Even with all the drawbacks, brands ensure one of the most loved payment modes sticks around.

But a pragmatic brand would remember safety comes first, for themselves - to minimise losses.

1. Smart disabling COD 

The advantage of data from individual consumers across 450+ brands, is that we also have the information on..

• Serial return abusers

• RTO prone zones

• Fraudulent user data, and more

Enabling us to gauge the risk level of a user, based on which the brand can choose to disable COD for those users through automation.

2. COD automations & more

Engineering automations/flows in place to reduce the probability of an RTO costs nearly nothing, compared to the alternative.

40% of e-commerce companies face challenges related to COD orders…

Adaptation is not a choice; it's a necessity. 

So, we automate marketing & communication strategies with hyper-personalisation.

A. Offering incentives for non-COD payments - based on age, past purchase data etc

B. Automate verification and confirmation

• Send a verification message once the COD option is chosen

• Ask for order confirmation on a consumer preferred channel 

Brands can make the procedure strict based on the risk level of the consumer. For example, if the user is a loyal customer, the confirmation step can be omitted. Whereas, if the user is prone to returns, the brand can choose a mandatory confirmation step to go through with the order.

C. Leveraging technology to enhance the COD process - providing a seamless experience with the help of real-time data across the board

D. Partnerships with payment gateways and banks

E. Rise of digital payment methods

According to a report by NPCI, UPI transactions in India grew by 75% in 2023, reaching a total of 40 billion transactions

Navigating Uncharted Territories:

We consider the above as the basic Safety Manual for the eCommerce Romantics out there.

Most brands consider removing COD entirely when they witness huge losses - and we know it is uncharted territory for most to explore options in the area..

But as we said before, the goal is to minimise COD losses, not to eradicate the COD mode of payment.

This way, the Indian audience are satisfied, while you are safe too.

That’s the end of our talk on “Getting in Bed with COD (Cash-on-delivery).”...

☕ See you on the next coffee date!

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